Chicago | Reuters — U.S. soybean futures set a one-week high on Thursday as worries about dry weather curtailing Argentina’s harvest overshadowed bearish data in a monthly U.S. Department of Agriculture report (USDA), analysts said.
Corn futures firmed on strong export demand while wheat retreated on profit-taking after multimonth highs.
Chicago Board of Trade March soybean futures settled up 4-3/4 cents at $9.87-3/4 per bushel and March soymeal closed up $6.30 at $341.70 per short ton after reaching $346, its highest since Jan. 25 (all figures US$).
CBOT March corn ended up 1/2 cent at $3.65-3/4 per bushel after touching $3.67-3/4, its highest since Oct. 25, while CBOT March wheat finished down 4-1/4 cents at
$4.56-1/4 after recording a four-month high at $4.64-1/2.
Strength in the soy complex was fueled by soymeal futures, which surged on fears of a crop shortfall in Argentina, the world’s biggest exporter of the high-protein animal feed.
USDA in a monthly supply/demand report lowered its estimate of Argentina’s soybean crop to 54 million tonnes from 56 million last month due to “unseasonable warmth and dryness.”
The Buenos Aires Grains Exchange cut its estimate to 50 million tonnes, from 51 million previously, and Dan Basse, president of AgResource Co., said some private analysts expect the harvest to fall below 50 million tonnes.
“Argentina exports (roughly) 50 per cent of the world’s meal. If they start having a bean crop much less than 47 or 48 (million tonnes), it gets really tight. It’s important that they get some soaking rains, quickly,” Basse said.
CBOT soybean futures dipped briefly after USDA raised its forecast of U.S. soybean stocks left at the end of the 2017-18 marketing year to 530 million bushels, up from 470 million in January, citing reduced U.S. soybean exports.
But worries about a drop in Argentina’s soy output held the spotlight.
“The protein side of the equation is what the market is looking at. Accordingly, (soymeal) is rallying because we just can’t afford an Argentine shortfall,” Basse said.
Corn futures rose on concerns about Argentine production and strong export demand for U.S. supplies. USDA, citing dryness, lowered its corn production forecast for Argentina to 39 million tonnes from 42 million tonnes last month.
CBOT corn futures pared gains, however, and even dipped lower at times, pressured by U.S. farmer selling.
CBOT wheat fell on profit-taking after the March contract hit $4.64-1/2, a four-month high.
Worries about dryness in the U.S. Plains breadbasket underpinned the market. But plentiful global wheat supplies limited rallies, along with ideas that the run-up in futures will curb U.S. export sales.
After the close, Egypt’s state wheat buyer set an international wheat purchase tender, with results expected on Friday.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.